Implementing search deal a tough task for MS, Yahoo

Juan Carlos Perez |
Feb. 22, 2010

Companies will have to execute the terms of their deal carefully and precisely.

Back in July, Yahoo estimated that, when fully implemented, the search deal would boost its annual operating income by about US$500 million, provide capital expenditure savings of about $200 million and increase annual operating cash flow by about $275 million.

Assuming the deal is implemented successfully, Yahoo is still left with a big question, according to Weiner: "If Yahoo isn't going to be known in the market as a leader in search technology, what do they want to be known as?," he said.

Being a general purpose Web portal and provider of online communications services won't be enough to make Yahoo an exciting Internet brand again and improve its competitive position, both technologically and financially, he said.

"For Yahoo to have kept up with competition in search, it would have had to spend an extraordinary amount of money so it made the pragmatic decision to spend those resources somewhere else," Weiner said.

There are opportunities in emerging fields like connected TV, mobile and video, he said.